Which of the following demonstrates the going concern concept? a) aqg industries sold $20,000 of product on credit to ssa manufacturing. ssa did not pay on time. aqg decides that it is fruitless to pursue collection so they write off the receivable from ssa. b) gail's garments has been in business for 20 years and during that period the company has gained a good reputation. gail would like the controller to acknowledge the value of that reputation by including it as an asset worth $100,000 but the controller says she cannot do it. c) aqg industries purchases $20,000 of product on credit from rsi manufacturing. aqg records the purchase as an increase in inventory and an increase in accounts payable. aqg feels that they will be able to realize the value from the inventory and settle the obligation to rsi in the weeks to come.

Kandon enterprises, inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. both divisions are considered separate components as defined by generally accepted accounting principles. the horse division has been unprofitable, and on november 15, 2018, kandon adopted a formal plan to sell the division. the sale was completed on april 30, 2019. at december 31, 2018, the component was considered held for sale. on december 31, 2018, the company’s fiscal year-end, the book value of the assets of the horse division was $415,000. on that date, the fair value of the assets, less costs to sell, was $350,000. the before-tax loss from operations of the division for the year was $290,000. the company’s effective tax rate is 40%. the after-tax income from continuing operations for 2018 was $550,000. required: 1. prepare a partial income statement for 2018 beginning with income from continuing operations. ignore eps disclosures. 2. prepare a partial income statement for 2018 beginning with income from continuing operations. assuming that the estimated net fair value of the horse division’s assets was $700,000, instead of $350,000. ignore eps disclosures.